UK markets picked up where they left off on Monday morning with little respite from the selling pressure experienced last week amid heightened tensions in Ukraine.

The FTSE 100 fell 2% last week, in line with global equity markets, as investors dumped so-called 'momentum' stocks which have performed well over recent months. In the US in particular, concerns about steep valuations going into the new earnings season prompted traders to offload shares, while Wall Street bellwether JPMorgan Chase & Co disappointed with its results.

The FTSE 100 was down 0.3% at 6,541 by midday today; it has not closed below this level since March 24th when it ended the session at 6,520.39.

Over the weekend, Ukrainian President Alexándr Turchínov gave pro-Russian radicals in the east of the country until today to lay down their arms. Following the wounding of a Ukrainian special forces officer and five other soldiers in a gun battle on Sunday, Ukraine said it would launch a large-scale anti-terrorist campaign against protestors who have barricaded themselves in various government buildings in the eastern region of the country.

Russia responded by urging Ukrainian authorities not to use force against pro-Russian radicals and called on Kiev to cease a "war with its own people".

Meanwhile, comments from European Central Bank President (ECB) Mario Draghi were also in focus, after he said the ECB would ease monetary policy further if the euro keeps strengthening, in order to help achieve medium-term price stability.

"Draghi may be betting that the prospect of money-printing alone will be enough to bring the euro's value down. But with many blaming the strong euro both for holding back exports and the deflationary threat hovering over the Eurozone, there is a long way to go to make Eurozone exports more competitive," said Tony Wilson, Head of Strategy at forex specialists FEXCO.

A reduction in risk appetite was benefitting shares in defensive sectors, such as consumer staples, this morning as investors sought out relatively 'safer' assets amid the wider market volatility.

Tobacco groups British American and Imperial were high risers, along with household and cosmetics products makers Reckitt Benckiser and Unilever and beverage groups Diageo and SABMiller.

Leading the downside were stocks which have performed well over the past year, including airlines easyJet and IAG, as investors took profits. Other stocks including Ashtead, Hargreaves Lansdown, Barratt Developments, Sports Direct, Ocado and Thomas Cook were also falling sharply after decent gains made over the last 12 months.

After months of negotiations, commodities trader and mining giant Glencore Xstrata finally reached an agreement to sell its Las Bambas copper project in Peru, giving the stock a lift this morning. Glencore said it would use part of the $5.85bn proceeds for a capital return to shareholders.

Other miners were also making small gains, including Antofagasta and Randgold Resources.

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